China exports climbed 14.5% in July

China’s exports jumped 14.5 per cent last month, more than double expectations, in a sign robust global demand for Chinese goods will help boost growth this year.

However, the world’s second biggest economy reported a mixed trade result for July as imports unexpectedly fell by 1.6 per cent, leaving China with a $47.3 billion trade surplus, according to figures released by the General Administration of Customs.

China’s double-digit jump in exports compared to expectations of a 7 per cent increase and a 7.2 per cent rise in June. Imports had been expected to lift 2.6 per cent and the small decrease reported for July is likely to raise concerns about weak domestic consumption.

China’s government is hoping higher demand from some of its biggest trading partners will help the economy to meet its growth target of about 7.5 per cent.

However, the International Monetary Fund has warned that the world’s second biggest economy may suffer a hard landing if it doesn’t introduce a raft of reforms.

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Markus Rodlauer, the IMF Mission Chief for China, said this week that “unless reforms are implemented to redirect the economy to a safer growth path, the risk of a hard landing will increase."

He listed China’s three biggest vulnerabilities as the rapid expansion of its shadow banking industry, weak local government finances and an overextended real estate sector.

The IMF is forecasting China will grow 7.1 per cent in 2015 if it continues to reform, down slightly from 7.4 per cent growth this year.

Meanwhile, in separate trade news, China said on Friday it “strongly regrets" the World Trade Organisation’s decision to uphold its ruling regarding the country’s restrictions on the export of rare earths. The WTO said China broke international trade rules by placing export quotas on rare earths, which are used to make mobile phones.

China had appealed the WTO’s initial March ruling after the United States, Japan and the European Union lodged a complaint. Those countries claimed China was limiting exports to boost prices and gain a competitive advantage for its domestic producers. China accounts for about 95 per cent of the global production of rare earths.

As China is a WTO member, Beijing is required to comply with the ruling.